Blu-ray stutters in face of tough economy, HD downloads

Now that HD DVD is out of the picture, Blu-ray should be soaring, right? Wrong …

Blu-ray's hold on the plastic video disc market is slipping—the opposite of what everyone expected once HD DVD bowed out of the competition. Blu-ray's market share fell to eight percent during the week ending on September 14, according to the latest data from Nielsen VideoScan, with regular old DVD making up the other 92 percent. And with the US economy now on even shakier ground than usual, Blu-ray's chunk of the market looks likely to stay low for some time.

The numbers show that Blu-ray's market share dropped 13.39 percent from the previous week, and that DVD's numbers actually went up by 0.15 percent. Netflix CEO Barry McCarthy recently told Home Media Magazine that he didn't expect Blu-ray to have much of an impact on the company's DVD business in 2008 at all. Citing high player prices, he said that only a fraction of Netflix subscribers currently rent Blu-ray disks.

"It may grow after the holiday selling season, if sales are slow and prices are cut more aggressively," McCarthy said.

It doesn't take a mathematician to note that eight percent is quite a bit lower than the 50 percent market share Sony wanted by the end of the year, at least according to Sony President Ryoji Chubachi this past April. Even though one or two Blu-ray players have finally dropped below the $200 price point—check Amazon for Sony's BDP-S300—they're just not being snapped up like some expected. Blu-ray's slowdown is a quite a change from earlier this year, when Blu-ray was seen as outpacing DVD.

Now that pocketbooks are feeling lighter than ever, it's unlikely that Blu-ray will do much better through the end of the year, either. People are happy enough with the way regular DVDs look on their HDTVs that it's not worth dropping another $200+ (plus even more to cover the more expensive movie purchases and rentals) on a Blu-ray player. And HD movie and TV downloads are becoming more popular than ever—many of them are even free, thanks to ad-supported streaming—and the short-term outlook for Blu-ray looks a little grim.